Tuesday, June 16, 2009

Kroenke waiting for move on Rams

Bernie Miklasz

ST. LOUIS POST-DISPATCH

Sunday, Jun. 14 2009

One of the more compelling aspects of the Rams' sale is the role of StanKroenke in the proceedings. Rams owners Chip Rosenbloom and Lucia Rodriguez,team insiders and other NFL executives and owners are wondering: what isKroenke going to do? Is he going to make a play for control of the team? And ifso, when?

Don't expect Kroenke to lay his plan out for us. He's staying underground onthe Rams' front and not returning media calls. He's not about to give away anyclues on his Rams' strategy.

Kroenke, worth an estimated $3 billion, is a busy sports mogul. He owns 40percent of the Rams. He owns the NBA Denver Nuggets, the NHL Colorado Avalancheand the Pepsi Center in Denver. He owns the Major League Soccer franchise inColorado and the stadium that houses the team. He is the majority shareholder(28.3 percent) of the prestigious Arsenal soccer club in the English PremierLeague. Kroenke owns a pro lacrosse team, an arena football team, and aColorado-based cable-sports network.

And Kroenke's real-estate development company continues to prosper, making himone of the nation's wealthiest individuals according to Forbes magazine.

So does Kroenke want to buy the available 60 percent ownership block andchallenge NFL rules that prohibit cross ownership? Or is he content to hangonto his 40 percent, oversee his other sports properties, concentrate onaccumulating more Arsenal stock and avoid a skirmish with the NFL?

After speaking to a couple of Kroenke associates — sorry, no names — I think Ihave a general handle on his approach. But I can't be sure. Remember, this isthe same Kroenke who made no noise about being interested in the Nuggets andthe Avalanche, only to swoop in and buy them at the end of the process. Kroenkewaited until the collapse of Bill Laurie's tentative deal for the teams, thenmade his move. And Laurie is Kroenke's brother-in-law, but Laurie knew nothingof Kroenke's intentions.

I believe Kroenke will sit and wait for others to make the first move.

It makes sense, because Kroenke has the right of first refusal on the Rams'sale. He can match any offer for the available 60 percent. By hanging back,Kroenke won't set the market and take the risk of bidding against himself tomeet Rosenbloom's price. Instead, it's smarter for Kroenke to wait for anotherinterested party to set the market, then react accordingly.

If another bidder makes an offer on the lower side, and the price is acceptableto Rosenbloom, then Kroenke can match the offer and get a relative bargain. Hecan save millions of dollars on the purchase. If Kroenke gets a great deal,then he may be more inclined to fight the league over that 60 percent.

And what if another bidder rushes in and pays whatever Rosenbloom-Rodriguez areasking for? Well, Kroenke can ask to be bought out (his 40 percent) at the samerate. Or he can keep his 40 percent, satisfied in knowing that the value of hisownership share just went up. A win-win for him.

And there could be other advantages for Kroenke to remain patient:

— If this process drags out — which it might, considering the strugglingeconomy and concerns over the league's serious labor issues with the players —Rosenbloom may have to settle for a buyer that the NFL doesn't like or want.And the NFL could turn to Kroenke to ask for his help — buy the 60 percent andpull the league out of a bad situation. In exchange, the NFL would accommodateKroenke by waiving the cross-ownership rules.

— If no local buyer comes forward, and the Rams are in danger of being sold toanti-St. Louis interests, Kroenke could ride in at the end and save the day.The city's political and business community would be grateful. And that wouldserve to help Kroenke in the looming strife concerning the team's lease at theEdward Jones Dome.

If Kroenke wants the Rams, would he be willing to sell his Denver teams tocomply with NFL rules? I'm told that's doubtful. But I'm told Kroenke will tryto lobby NFL owners to get the rule changed. So he might be willing tochallenge the league over this issue.

In Kroenke's case, the NFL rule is stupid, because he already owns 40 percentof the Rams. The NFL insists that a lead ownership partner have a minimum shareof 30 percent, and Kroenke already has that, plus another 10 percent. So isn'tthis pretty silly?

And why would it matter if Kroenke kept his 40 percent but lined up multipleinvestors to purchase smaller shares that add up to the other 60 percent?

Besides, it's not as if Kroenke needs Rams profits to be able to compete in theDenver sports marketplace against Pat Bowlen, who owns the NFL Denver Broncos.Kroenke and his wife, Anne, are worth a combined $7 billion. They don't needRams' dollars. This is lunacy.

Kroenke is just what the league wants in an owner. He's a successfulbillionaire. And he's already in the club.

It will be fascinating to see how Kroenke plays poker. But if history tells usanything, it's that the cool-headed Kroenke is highly capable of waiting andwatching the other players blow themselves up. That's when Kroenke scoops upthe enormous pile of chips in the middle of the table.